India Quotient aims to raise $24.3M in new fund to back pre-revenue mobility startups

Mumbai-based venture capital investor India Quotient (IQ) is targeting a Rs 150 crore ($24.3 million) corpus for its second fund to be focused on investments in pre-revenue start-ups.

The proposed fund, which is five times larger than the firm's Rs 30 crore maiden fund raised last year, will target mobility-focused consumer startups.

"The follow on rounds of investors have become very large. Hence, it makes sense to have a large fund," Anand Lunia, founder of IQ, told VCCircle. The fund will have a duration of nine years including two years of extension.

IQ has also appointed Gaurav Mittal as a new partner of the firm. He is an education entrepreneur having floated JEE coaching venture Quest Tutorials in the past. An alumni of IIT Roorkee and IIM Lucknow, Mittal has also worked as head of marketing with Meritnation.com, an online portal which provides study material and solutions for educational purposes, a role he quit last year.

He has been an angel investor for the past two years.

Mittal joins Lunia and Madhukar Sinha, the two founding partners of IQ.

IQ expects to close the fund over the next six months. The firm expects to have multiple repeat investors from its first fund. A small portion of the fund corpus has also been reserved for Indian high net-worth individuals (HNIs). Institutional investors in Fund I included Omidyar Network, SIDBI, Times Internet and Unilazer Ventures, the private investment vehicle of media industry veteran Ronnie Screwvala.

The firm is looking at increasing its team of mentors who will engage in advising the portfolio companies. "We will not have operational partners as this model doesn't work with the startup space. A VC operating partner cannot complete a start up team. The team has to be completed by itself," Lunia said.

The firm will be investing purely via convertibles in the portfolio companies. The firm is still investing from Fund I and has completed 18 deals so far. Some of its deals include lingerie e-tailer Pretty Secrets, Nearify, Delhi-based health food start-up Frsh, Mumbai-based Purple Squirrel, an IIT Bombay incubated start-up that forms a platform to connect students with corporates and Bangalore-based mobile payments startup Momoe, among others.